Should I buy Ford Motor shares after a positive view from Bank of America?

Ford Motor (NYSE: F) shares have advanced more than 10%  this Tuesday, and there is a possibility to break over $25 for the first time since 2001.

Bank of America has a positive view for the shares of this company, and it reported that Ford is just starting to hit a more sustainable inflection in earnings.

Bank of America has a positive view

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Bank of America reported this week that it sees upside potential for the shares of Ford as the company announced that it would have the global capacity to produce 600k battery electric vehicles annually within just 24 months. Bank of America added:

These accelerated targets illustrate Ford’s commitment towards the electrification revolution and are made possible given the material investments the company has made to date in pursuit of its goal to invest $30bn+ in E.V.s through 2025. In fact, we would argue that the increase in production capacity and mounting consumer interest could indicate that the tipping point in Ford’s transition from ICE vehicles to electric vehicles is on the near-term horizon.

According to Bank of America, Ford is just starting to hit a more sustainable inflection in earnings due to a combination of a favorable product cadence in the U.S. market on top of the restructuring efforts and Ford’s commitment towards electric vehicle adoption.

Bank of America assigned a buy rating on Ford with a price target of $26 on the company’s stock. Ford’s business has proven improvements throughout the third fiscal quarter, and the company reported strong earnings results in October.

Automotive revenue has decreased less than 5% Y/Y to $33.2 billion, while the GAAP earnings per share were $0.45 (beats by $0.24).

The company’s management remains very optimistic about the upcoming quarters in terms of growth, and it expects cash flow over the future planning period to be more than sufficient to fund growth priorities.

Ford has the ability to mitigate cost pressure vs. smaller peers amidst supply chain and labor disruption issues, and it is important to say that Ford more than doubled in share price in 2021.

Ford is a stable company with a bright future, but investors should consider that if the U.S. stock market enters a more significant correction phase, the shares of Ford could be at much lower levels.

$25 represents current resistance

Ford Motor shares are advancing in 2022, and there’s a possibility to break over $25 for the first time since 2001.

According to technical analysis, the bulls control the price action, and rising above $25 supports the positive trend.

On the other side, if the price falls below $20 support, it would be a “sell” signal, and we have the open way to $18.

Summary

Ford shares have advanced more than 10% in the last twenty-four hours, and there is a possibility to break over $25 for the first time since 2001. Bank of America assigned a buy rating on Ford with a price target of $26 on the company’s stock, and the company’s management remains very optimistic about the upcoming quarters in terms of growth.

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